ANZ holds out on interest rate cut

Written By Unknown on Kamis, 06 Desember 2012 | 00.04

The ANZ reviews its interest rates on the second Friday of each month, with the next review due on December 14. Source: AFP

THREE of the big four banks have sliced their standard variable interest rates, but stopped short of passing on the Reserve Bank's 25 basis point cut to its cash rate.

Westpac Bank, the Commonwealth Bank of Australia and the National Australia Bank today all announced they would cut their standard variable home loan rates by 20 basis points.

Westpac's standard variable rate will fall to 6.51 per cent on December 17, while CBA's drops to 6.4 per cent on December 10.

NAB's rate will decrease to 6.38 per cent from December 10, while its variable business loan rates will also be cut by 20 basis points.

The moves come a day after the Reserve Bank of Australia cut its cash rate by 25 basis points to three per cent.

National Australia Bank is the first of the big four banks to cut its interest rates.

The ANZ bank reviews its interest rates on the second Friday of each month, with the next review due on December 14.

Commonwealth Bank said it had to balance the needs of its 1.8 million home loan borrowers against those of its 11 million depositors and its 800,000 Australian shareholders.

"A significant factor impacting this balancing of needs has been the increased competition in the domestic deposit market which has benefitted many customers, including those who rely on interest earnings to meet their living expenses,'' the bank said in a statement.

The decision is effective from December 10.

National Australia Bank has passed on 0.2 per cent of the .25 per cent rate cut.

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This comes after National Australia Bank was the first of the majors to break ranks and cut interest rates, passing on 0.2 per cent of the cut to customers.

The bank blamed higher deposit rates and elevated wholesale funding costs for holding back 5 basis points of the Reserve Bank's 0.25 percentage point cut yesterday.

NAB pledged to remain the lowest of the Big Four banks with its standard variable rate dropping to 6.38 per cent.

Group executive personal banking Lisa Gray said the decision was not taken lightly but the bank had to strike the right balance between costs of funding and a competitive offering for customers.

"Our new rate is effective from December 10 and continues our delivery of our pledge to offer the lowest standard variable home loan rate of the major banks for 2012,'' she said.

"NAB has offered the lowest standard variable home loan rate of the major banks for 41 months and our track record of being competitive speaks for itself.''

But NAB has refused to confirm is its lowest offering will remain in place next year.

Bank of Queensland dropped its standard variable home loan rates by 0.2 percentage points to 6.51 per cent - but the reduction will not be passed on until December 21.

Online lender ING Direct has committed to pass on the full RBA cut, reducing its variable mortgage rates by 25 basis points from December 24.

ANZ won't make any decision on its interest rate setting until after its rate setting committee meets on December 14.


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